Read the CySEC Circular C678
Memo #04-2025
CySEC Circular No: C678
Date: 22/01/2025
Subject: Guidelines on funds’ names using ESG or sustainability-related terms (ESMA 34-1592494965-657)
Purpose: To inform Cyprus Investment Fund Managers that ESMA has published Guidelines on funds’ names using ESG or sustainability related terms.
In Summary:
CySEC has issued the Circular C678 on 21/01/2025 to inform the Cyprus UCITS Management Companies and Self-Managed Cyprus UCITS (‘CUCITS MCs’), Cyprus Alternative Investment Fund Managers and Self-Managed Cyprus AIFs (‘CAIFMs’), Sub-Threshold Cyprus Alternative Investment Fund Managers and Self-Managed Cyprus AIFs (‘sub- threshold CAIFMs’), that the European Securities and Markets Authority (‘ESMA’) has published the Guidelines on funds’ names using ESG or sustainability related terms (ESMA34-1592494965-657). The Guidelines published on 21/08/2024.
The Guidelines apply to UCITS management companies, including any UCITS which has not designated a UCITS management company, Alternative Investment Fund Managers (AIFMs) including internally managed AIFs, managers of European Venture Capital funds (EuVECA), managers of European Social Entrepreneurship Funds (EuSEF), managers of European Long-Term Investment Funds (ELTIF) and managers of Money Market Mutual Funds (MMFs), as well as National Competent Authorities (NCAs). In addition, following a decision by CySEC’s Board of Directors, dated 12/01/2025, the Guidelines also apply to Cyprus sub-threshold AIFMs.
The Guidelines apply in relation to the obligation to act honestly and fairly in conducting their business as well as the obligation that all information included in marketing communications is fair, clear and not misleading.
The name of a fund is a means of communicating information about the fund to investors and is also an important marketing tool for the fund. The purpose of the Guidelines is to specify the circumstances where the fund names using ESG or sustainability-related terms are unfair, unclear or misleading.
The Guidelines give guidance to fund managers by imposing specific criteria which must be met by the funds using ESG or sustainability related terms in their names.
The Guidelines apply as of 21/11/2024. Managers of any new funds created after the date of application of the Guidelines, should apply these Guidelines immediately, in respect of those funds. Managers of funds existing before the date of application of the Guidelines, should comply with the Guidelines in respect of those funds, at the latest six months after the date of application of the Guidelines, hence the 21/05/2025.
CySEC also informs that ESMA published on 13/12/2024 three Q&As providing further guidance on specific aspects on the practical application of the Guidelines.
CySEC notes that it adopts these Guidelines and the relevant Q&As by incorporating them into its supervisory practices and regulatory approach.
CySEC further notes that Regulated Entities must take the necessary action in order to ensure their compliance with the Guidelines.
The Guidelines can be found on the following link: https://www.esma.europa.eu/document/guidelines-funds-names-using-esg-or-sustainability-related-terms
The three Q&As can be found on the following link: https://www.esma.europa.eu/press-news/esma-news/esma-puts-forward-qas-application-guidelines-funds-names
Read the CySEC Circular C678
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